Due to the draw-down of the 33rd Fighter Wing at the Eglin AFB complex, approximately 2000 airmen are being relocated from the Emerald Coast of Florida to other air force bases around the country and world. In addition about 1000 personnel from Hurlburt Field are moving to Canon AFB in Clovis, New Mexico. Unfortunately, airmen in the Fort Walton Beach, Crestview, Navarre, Niceville and Destin areas of Florida are facing the same predicament as most Americans. Many have mortgage balances that are more than the market value of their homes. Thus, when faced with a forced military move, and such choices as to lease out their homes with insufficent rent to cover the mortgage, or foreclosure, the preferred strategy is to conduct a short sale. A short sale occurs when the seller’s mortgage holder accepts fair market value at sale of the property, and, in the best case scenario, forgives the rest of the mortgage debt.
The good news for Eglin and Hurlburt Field military personnel is that further financial help may be available through the Homeowners Assistance Program (HAP). HAP is a long-established Department of Defense program that is managed by the US Army Corps or Engineers. HAP was initially used only to assist in Base Realignment and Closure (BRAC) moves, but the new economic stimulus plan has expanded the program to include Permanent Change of Stations (PCS) moves.
What HAP offers in terms of relief is the following:
The Government may-
1. Reimburse you for part of your loss from selling your home
2. Assist you, if you don’t receive enough proceeds from the sale of your home to
pay off your mortgage
3. Buy your home by paying off the mortgage
4. Help you, if you default on your mortgage
Further, HAP states you should continue try to sell your home on the open market. According to the program, you may be paid up to 95% of the difference of the Fair Market Value prior to the BRAC or PCS announcement affecting you, and the appraised value at time of sale, with potential for some closing cost reimbursement. HAP will not reimburse for the total loss. At the time of this writing, I have three Hurlburt Field and Eglin AFB home sellers who have applied for HAP simultaneously while attempting a short sale. How the government will interact with short sale lenders is to be determined.
Local Eglin AFB commanders are still trying to get formal interpretation of the program as it applies to Emerald Coast airmen. One of the controversial limits of the program expansion in the new American Recovery and Stimulous Act is that it applies only to homes purchased prior to July 2006. This limiting date does not correspond to the still-inflated real estate market in the ensuing months, in which many military members continued to purchase homes as outlined by Air Force Major Jason Trew’s Letter to Congress.
While the language in the current bill is still being interpreted by Air Force authorities, you might be eligible to receive benefits under the new legislation. If you are in a short sale situation, stationed at Eglin AFB, Hurlburt Field or Duke Field, you should see your commander or first sergeant and make your Application for Homeowner Assistance. As always, consult an experienced real estate agent who specializes in short sales to help you through the process.